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orb_king t1_ixmsf35 wrote

BUT I thought if we built more luxury housing, the rents would go down! 🤯 And now you’re telling me that those wealthy enough to own a luxury apartment building aren’t noble participants in the holy logic of supply and demand?!

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JCwhatimsayin OP t1_ixmtu82 wrote

Well, I guess we all sorta naively thought the tenants were the customers. Turns out there's a separate market here in Jersey City where the tenants are the assets and the asset buyers are the customers. There's still a market out there where tenants are customers, and these price-fixed buildings may still be easing the pressure on the supply in THAT market.

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orb_king t1_ixnthiv wrote

That’s exactly how the ocean of empty real commercial real estate works, too. Lots of it is traded via ETFs and other more complex derivatives. It’s owned by holding companies that are traded as part of peoples retirement funds, or traded overseas as a hedge against a local economy, etc. “Supply and demand” is pretty far removed from real estate at this point.

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JeromePowellAdmirer t1_ixqx0pn wrote

This does not disprove supply and demand. The same software is used in Harrison yet prices are lower. This maximizes rents through collusion subject to supply and demand constraints. Take an economics class and you'll find out how that's possible.

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orb_king t1_ixrrxbt wrote

Don’t forget to pick up your bowties at the dry cleaner!

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